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August 4, 2006

Ukraine’s parliament approves Yanukovich as PM

by Sam Savage

By Yuri Kulikov

KIEV (Reuters) - Ukraine's parliament approved Viktor
Yanukovich as prime minister on Friday, sealing the comeback of
the Moscow-leaning politician after his humiliation in the
"Orange Revolution" two years ago.

He will share power with President Viktor Yushchenko, the
man who defeated him in 2004.

The president said he had cast-iron guarantees from
Yanukovich that he would not try to reverse the revolution's
pro-Western principles.

Yanukovich, who held the prime minister's job before the
revolution, gained 271 votes from the 450 deputies in the
parliament, the Verkhovna Rada. His supporters applauded his
victory and presented him with a bouquet of red flowers.

"I am itching to get down to work," he said before the
vote.

"I've been ready (to serve as prime minister) for a long
time," Yanukovich told reporters.

Many supporters of the "Orange Revolution" say Yanukovich
will use his new power to check Ukraine's drive to join NATO
and the European Union. They also say business interests close
to him will have undue influence over economic policy.

But markets expect pragmatic economic policies under
Yanukovich and his team. They gained a reputation as competent
managers during their previous stint in government. Yanukovich
has said he will lower taxes for business.

Yanukovich and his allies -- who now include the
president's Our Ukraine party -- were thrashing out the cabinet
line-up.

Yanukovich's own appointees will dominate. But under the
constitution Yushchenko has control of key ministries like
foreign affairs and defense.

In addition, the job of first deputy prime minister will go
to a Yushchenko ally, a senior Our Ukraine official told
Reuters. Ukrainian media pointed to Petro Poroshenko, a wealthy
businessman, as the most likely candidate.

The president would also have the right to appoint the
interior minister, said the Our Ukraine official.

Mykola Azarov, a technocrat who oversaw economic and
financial policy during Yanukovich's last premiership from
2002-04, will be finance minister, said media reports.

Arseniy Yatsenyuk, the 31-year-old economy minister, was
expected to keep his job.

RELATIONS WITH RUSSIA

Yanukovich's comeback owes much to bickering in the
"Orange" camp. Their first government fell apart and they ran
as competing parties in a March election, allowing Yanukovich
to form a majority in parliament.

Yanukovich favors closer ties with Moscow. Mass protests in
2004 overturned his election as president and swept Yushchenko
to power. Metals and energy magnate Rinat Akhmetov, Ukraine's
richest man, is an influential member of his party.

In an interview with Russia's Izvestia, Yanukovich said
fixing the faltering economy required a better relationship
with Russia. "If we accept Russia as a partner, than we will be
able to solve our biggest problems, including over gas," he
said.

Russia's state gas giant Gazprom briefly cut off supplies
to Ukraine in January in a dispute over contracts. It is now
warning of a second hike in prices. Gas prices are a crucial
factor in Ukraine's economy.

The coalition deal ended a parliamentary deadlock that had
been holding up key decisions for months and left Ukraine
without a fully-fledged government and Constitutional Court.